LKQ Corp. has reported revenue for the second quarter of 2019 of $3.25 billion, an increase of 7.2%, compared to $3 billion in the second quarter of 2018.
For the second quarter of 2019, parts and services organic revenue declined 2.1%, (1.3% on a per-day basis), and acquisition revenue growth was 12.6%, while the impact of exchange rates was (2.5%), for total parts and services revenue growth of 8%.
The company said net income for the second quarter of 2019 was $150 million, a decrease of 4.2% year-over-year. Diluted earnings per share for the second quarter of 2019 was 48 cents as compared to 50 cents for the same period of 2018, a decrease of 4%.
The second quarter 2019 results included a $25 million non-cash impairment charge, net of tax, related to an expected recovery below carrying value of its previously announced assets held for sale. On an adjusted basis, net income was $204 million, an increase of 6.3% as compared to the $192 million for the same period of 2018. On an adjusted basis, diluted earnings per share for the second quarter of 2019 was 65 cents, an increase of 6.6% as compared to 61 cents for the same period of 2018.
Dominick Zarcone, president and CEO of LKQ Corp., stated, “We continued to make progress on our key productivity initiatives during the second quarter, which are having a positive impact on our financial and operational performance. We delivered this performance notwithstanding difficult revenue growth comparisons across all of our operating segments, a soft collision environment in the U.S. and the ongoing macroeconomic challenges and the impact of one less selling day in Europe. Against this backdrop, our continued focus on integrating and simplifying our operating model to drive cash conversion resulted in LKQ generating the highest quarter of operating cash flow in the company’s history. Additionally, in North America we produced Segment EBITDA margins of 14.4%, a 130-basis point improvement over last year and the highest level since the second quarter of 2017.”
On a six-month year-to-date basis, revenue was $6.3 billion, an increase of 10.4% from $5.8 billion for the comparable period of 2018. Parts and services organic revenue for the first six months of 2019 declined 1.1% (0.1% on a per day basis).
Net income for the first six months of 2019 was $248 million, a decrease of 19.9% as compared to $310 million for the first half of 2018.
Diluted earnings per share for the first six months of 2019 was 79 cents, a decrease of 20.2% as compared to 99 cents for the same period of 2018. On an adjusted basis, net income for the first six months of 2019 was $380 million, an increase of 5% as compared to the $362 million for the same period of 2018. On an adjusted basis, diluted earnings per share for the first six months of 2019 was $1.21, an increase of 4.3% as compared to $1.16 for the same period of 2018.
Varun Laroyia, executive vice president and CFO, commented, “Our operational focus and continued momentum on active working capital management and prudent capital spending enabled us to increase our 2019 annual guidance for free cash flow. However, our revised guidance also reflects the soft macroeconomic environment we are facing in Europe and the headwinds from lower scrap metal prices, two dynamics we believe will continue for the balance of 2019, though partially offset by our ongoing cost structure optimization.”
